California lawmakers have been embroiled in a legislative battle over the authority of the state’s insurance regulators. Earlier this year, legislation was introduced that would expand the power of regulators and give them full authority to deny or approve insurance rate increases from the state’s insurance companies. Under the law, regulators would be able to deem rate increases unjustified and excessive with minimal information to back up their determination. This legislation has attracted its fair share of opponents, but the bill’s supporters say that the state must be able to regulate health insurance premiums in order to ensure consumers are protected.
The law is designed to benefit consumers by stopping insurance companies from raising the prices of their products to unreasonable levels. Regulators fear that insurers may do this because of a provision in the Affordable Care Act that makes health insurance mandatory for every U.S. citizen. Under the law, regulators will be able to make changes to rate proposals submitted by insurance companies or reject them outright.
Insurers have been raising their premiums recently, partly due to the rise in demand for medical treatment and the cost of drugs and emerging technologies. Insurers argue that higher premiums are necessary to keep up with rapid inflation, but several consumer advocacy groups have rejected this argument, saying that insurance is becoming too unaffordable.
The fate of the bill lies with the California Senate, who will determine whether regulators are due such authority or if the system should remain as it is.